Rising crude oil prices, inflation and higher bond yields globally have narrowed the Reserve Bank of India’s room to hold rates unchanged, BNP Paribas said. India’s macro-outlook has weakened as Brent crude rose above $100 per barrel amid global tightening
Orders dried up as a result of this, they said, adding that this created a heightened uncertainty in the forex market, causing excess volatility in the Indian rupee, which was avoidable.
Besides, positive developments on COVID-19 vaccine front, improved domestic macro-economic data and weakness of the American currency against key rivals also supported the rupee.